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$2.13 Is the Tipping Point — America's Food Servers Are Grossly Underpaid

Jayaraman's new book 'Behind the Kitchen Door' makes the case for a major wage hike.

The following is an excerpt from Saru Jayaraman's new book, Behind the Kitchen Door (ILR Press, Cornell University Press, 2013). 

Right now, earning $2.13 per hour, I don’t have enough for my kids, I can’t put them through college. I barely have enough to put food on the table.
—Server, Man, New Orleans

I’m not even worth one cheeseburger an hour.
—Busser, Man, Six Years in the Industry, Chicago

We don’t usually think of food service workers as poor, if we think of them at all.

I used to be a bad tipper. Even though I ate out frequently, I didn’t understand what tipping really meant. Part of me resented the whole idea. Weren’t servers being paid for their jobs? Why did I need to pay more than the price of my meal? Wasn’t service part of the menu price? I worked hard for my money, and eating out was a guilty pleasure, so feeling compelled to leave something extra just didn’t seem right. If I left $5 for a $40 meal, I felt good about myself.

It  took me years to understand how tipping really works. First, I learned that my $5 is shared by many different people: the waiter who takes my order, the runner who brings out my food, and the bussers who clean my table and refill my bread basket and water. In some restaurants, the waiter has to ask a bartender to prepare the drinks, and a barback may assist. In the finest fine-dining restaurants, a captain greets customers and oversees the service they receive. All those workers get a piece of my $5.

Here’s the worst part: the federal minimum wage for tipped workers is $2.13 an hour. That means the federal government permits restaurants nationwide to pay tipped workers an hourly wage of only $2.13, as long as the workers’ tips make up the difference  between  $2.13 and the federal minimum hourly wage of $7.25. If the tips do not cover the difference, the employer is supposed to pay it. In 32 states, the tipped minimum wage is actually higher than the federal tipped minimum wage (e.g.,$2.65 or $4.25 an hour), and in 7 states the minimum wage is the same for tipped and nontipped workers.1 However, 13 states operate under the federal tipped minimum wage of $2.13, and another 8 states have a tipped minimum wage of less than $3.00 an hour. Thus, 21 states—almost half of the United States—allow restaurants to pay their employees less than $3.00 an hour. In several of those states, there is no state minimum wage at all. That means some restaurants in these states can get away with not paying their workers anything! As long as these restaurants bring in less than $500,000 in revenue annually (and therefore don’t fall under the purview of federal law), they can force their workers to live entirely off their tips.

The system is further complicated by the rules governing who gets a share of the tips. In a restaurant that complies with the law, the only workers taking a share of the tips are the nonmanagerial employees, who interact directly with customers. Ideally, a waiter collects tips from his or her tables and distributes them among the employees described above. In a “pooled house,” the waiter puts all of his or her tips into a pool, and at the end of the night, all of the tips in the house are distributed among service employees using a point system—five points for captains, four points for waiters, and three points for runners, for example. In a “nonpooled house,” the waiter collects his or her tips and then, using a percentage system, “tips out” the runner, bussers, bartender, and others at the end of the night.

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